ShameH1B contacted a labor expert at the Department of
Labor in Washington D.C. and asked the question: Can American citizens be
replaced by H-1Bs legally? In short, the answer is YES, YES, YES!!!
|Deptartment of Labor:
Except in certain very specific conditions,
outlined in the American Competitiveness and
"Workforce Improvement"Act of 1998, it's perfectly
legal to replace US workers with H-1Bs.
That response from the DOL motivated this website to do a study of the
protections that the H-1B law supposedly has for American workers. Where
not noted, all material was copied from the
Employment Law Guide.
|Ms. JACKSON LEE
HEARING BEFORE THE SUBCOMMITTEE ON IMMIGRATION AND CLAIMS OF
THE COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
I believe that the current high demand market for certain
technical specialties is that it should encourage us to
retrain displaced workers, attract underrepresented women
and minorities, better educate our young people and
recommission willing and able older workers who have been forced
Ms. Lee acknowledged to a House subcommittee that H-1B will displace
workers and says that these workers should be retrained.
In 1995, the DOL Inspector General found widespread
abuses of the H-1B program, and former Secretary of Labor
Robert Reich argued for changes in the H-1B provisions so DOL
could take action against employers who displace U.S.
workers with nonimmigrants.
Some, however, think DOL had already gone too far in
regulations effective in January 1995, maintaining that
they burden firms who hire only a few nonimmigrants with
requirements aimed at large scale hiring abuses.
This rather insensitive statement basically says that as long as
worker displacement isn't widespread, companies shouldn't be
burdened with regulations that protect Americans.
|Summary: ACWIA that 8 U.S.C. 1182(n)(1)(E)
only applies to applications filed between the time the final implementing
regulations are promulgated by DOL and September 30, 2001.
Just in case the loopholes discussed below aren't enough for
companies that want to replace Americans with H-1Bs, these meager
protections will expire soon.
|Summary: ACWIA (8 U.S.C.
1182(n)(1)(E) prohibits H-1B dependent employers and
willful violators from hiring an H-1B nonimmigrant if their
doing so would displace a U.S. worker from an essentially equivalent
job in the same area of employment.
This sounds like a very good protection until you read what the
terms "essentially equivalent job" and "H-1B
dependent" really means.
|A job shall not be considered to be
essentially equivalent of another job unless it involves
essentially the same responsibilities, was held by a United
States worker with substantially equivalent qualifications and
experience, and is located in the same area of employment as
the other job.'' This definition, thus, requires three
comparisons to determine whether displacement occurs: job
responsibilities; workers; and locations.
Companies would have no problem shuffling job descriptions to that
they would comply with this loophole. They could fire a
programmer/analyst with Oracle experience and hire an H-1B software
engineer with Oracle and Access experience. As far as location is
concerned everybody knows how the corporate shell game works:
Employee A (American) from Department 1 is transferred to Department
Department 2 fires Employee A.
Department 1 hires an H-1B.
Result: Employee A lost his job, but the company will claim he wasn't
replaced with an H-1B because the two departments are separated - by an
Definition of "H-1B dependent
(an employer that has fewer than 26 full-time
equivalent employees in the U.S. and more than 7
"non-exempt" H-1Bs, or an employer that has between 26
and 50 full-time equivalent employees in the U.S. and more
than 12 "non-exempt" H-1Bs, or an employer that
has at least 51 full-time equivalent employees in the U.S.
of whom at least 15 percent are "non-exempt" H-1Bs.
If a company isn't H-1B dependent it can legally fire
and replace Americans. So how many companies are barred from replacing
American employees by this definition? Here is a definition of exempt:
|... Exempt H-1B
nonimmigrants" includes any H-1B who receives wages
(including cash bonuses and similar compensation)of at
least $60,000 a year AND any H-1B with a master's or higher
degree, "or its equivalent," in a specialty related
to the employment.
None of the "exempt" H-1Bs count in determining whether
an employer is H-1B dependent!
The H1-B doesnt actually have to have a real accredited
Masters degree. The company can say that their experience level
is equivalent to a Masters degree.
What that means is that companies can give a Master's degree
equivalent to any H-1B they want to claim is exempt. How many companies
are willing to give a U.S. citizen an associate Master's degree? I doubt
if it has ever happened.
90 Day Rule
The prohibition on displacement within the employer's
own workforce applies for 90 days before and 90 days after the
date of filing of any H-1B petition based on the LCA.
If an employer fires an American worker 91 days before or after
filing for an LCA they are totally legal. In many situations the
H-1B is already employed at the company before the LCA is filed, so
this huge loophole allows companies to hire the H-1B, fire the
American, wait 91 days, and then file for an LCA. This seems to be
the largest loophole for companies that want to replace Americans
|The prohibition on displacement
within the employer's own workforce applies for 90 days
before and 90 days after the date of filing of any H-1B
petition based on the LCA. The prohibition on ``secondary''
displacement, at another employer's worksite, applies for 90 days
before and 90 days after the placement of H-1B worker(s) at the
worksite. These prohibitions do not apply to the placement of
``exempt'' H-1B workers, if the employer's LCA involves
only ``exempt'' nonimmigrants.
If a company hires a salaried H-1B, they don't even need to wait 90
days to fire their American employee. Check out my Visa Database
and you will see that almost all H-1Bs are salaried (or exempt).
|...an employer is prohibited from
``displacing'' a U.S. worker who is ``employed by the
employer'' or is employed by some other employer at whose
worksite the sponsoring employer places an H-1B nonimmigrant where
there are ``indicia of employment'' between the H-1B worker and
that other employer.
So you may ask what is an "employed by the
employer"? Here is their answer
|ACWIA contains no definition of the
phrase ``employed by the employer.'' In this circumstance,
where Congress has not specified a legal standard for
identifying the existence of an employment relationship,
the Department is of the view that Supreme Court precedent
requires the application of ``common law''..... Mindful of
the Supreme Court's teaching that since the common-law test
contains ``no shorthand formula or magic phrase that can be
applied to find the answer...
Is this hilarious or what?
Whomever wrote this section will never have to fear being unemployed
because Jay Leno's can always use good comedy script writers!!!
|In a provision described herein as
the ``secondary displacement prohibition,'' the ACWIA
prohibits the displacement of U.S. workers employed by
another (``secondary'') employer, if an H-1B-dependent employer
(or willful violator) intends or seeks to place its own H-1B
workers with that other employer in a situation where, among
other things, there are ``indicia of an employment
relationship between the nonimmigrant and such other
The Department, after careful consideration, has
concluded that this term--``indicia of an employment relationship''--identifies
a relationship which is less than an employment
relationship but more than the H-1B worker's mere performance
of duties at the secondary employer's worksite (such as being
dispatched for a brief part of a work day to diagnose or repair
equipment at that other employer's location).
This sounds like a way to give bodyshops a great loophole as well
as companies that loan their H-1Bs to other divisions. Companies can
always claim that they are "less than more".
|...an H-1B employer may be
debarred for a secondary displacement ``only if the Secretary of
Labor found that such placing employer knew or had reason to
know of such displacement at the time of the placement of
the nonimmigrant with the other employer.''
So all the placing employer had to say is that they didn't know.
Both employers can point fingers at each other and nothing will
ever be proved.
|The ACWIA's secondary displacement
prohibition requires that certain H-1B employers
(H-1B-dependent; willful violator) not place any H-1B
worker at another employer's worksite (to work under ``indicia
of employment'' with such secondary employer), ``unless
the [H-1B] employer has inquired of the other employer as
to whether, and has no knowledge that ... the other
employer has not displaced or intends to displace a
United States worker employed by the other employer'' within
the period of 90 days before and 90 days after the H-1B
worker's placement at that worksite. The ACWIA further
specifies (in the enforcement and penalties provisions)
that the H-1B employer may be debarred for a secondary
displacement ``only if the Secretary of Labor found that
such placing employer ... knew or had reason to know of such
displacement at the time of the placement of the nonimmigrant
with the other employer.''
The requirement that a company has to admit that they
are a willful violator is moot because no company would be that stupid.
If a complaint is lodged against a company, it will come down to one
employer's word that against another. That is almost impossible to prove
in court. The secondary employer (bodyshop) can claim that they were
never told that an American worker was to be replaced. Try
If the case can't be resolved in court, and it
won't, it is up to the Secretary of Labor to decide which employer is
lying. Big deal! The Secretary won't be able to arbitrate a
dispute like this any better than a judge. I would be willing to
bet that the Secretary of Labor has never once made a decision of
In the cases where finding a violation of the non-displacement
provision comes down to one employer's word against another (as in
the secondary displacement scenario), it is unlikely that DOL
would ever get far enough to into the penalty process to have to
choose which employer was lying. Before DOL can even institute a
hearing on an alleged violation, it has to decide whether there
is a "reasonable basis" to believe a violation has been
committed. It is likely that DOL would require serious documentation
of a violation before it would find a reasonable basis, and only
then would it proceed to the hearing stage.
|The language and structure of these
provisions demonstrates that Congress intended for the H-1B
employer to take proactive steps to ascertain whether
placement of H-1B workers would correspond with the lay off
of similarly-employed U.S. workers. In enacting this
provision, Congress clearly intended that the employer make
a reasonable inquiry and...... blah, blah blah
This is a feel good paragraph that attempts to make the American
public feel good about the intentions of the DOL and our Samaritan
corporations. I don't feel good and neither should you!
|The Department recognizes that the
ACWIA obligation concerning ``secondary displacement''
could easily be subverted if a placing H-1B employer were
merely to make a pro forma inquiry and rely on a pro forma
The DOL recognizes that employers will lie and cheat. The problem is
that they don't intend to do anything about it.
|The ACWIA specifies that, even
though an H-1B worker may be placed in a job similar to one
formerly held by a U.S. worker, no ``displacement'' or
``lay off'' is considered to have occurred if the U.S.
worker left the job through ``voluntary departure or voluntary
retirement.'' As a logical and obvious matter, the requirement
of ``voluntariness'' is crucial to the effectiveness of
this provision in assuring appropriate protections of U.S.
workers' jobs in situations where nonimmigrants are being
Companies all over the United States are forcing employees to
"volunteer" to retire. Older employees are told that they
can either "volunteer" to retire and they will get a
severance, or they may be subjected to a lay off with no benefits.
This corporate blackmail is the easiest and most favored way to
eliminate over 40 year old employees. Basically the DOL is giving companies
the right to fire older employees and replace them with H-1Bs.
|Further, the employer is required
to keep all documents concerning the departure of such employees...
These records are necessary for the Department to determine
whether the H-1B employer has displaced similar U.S. workers
with H-1B nonimmigrants.
Companies are required to document the firing of their American
workers. Since the DOL almost never investigates these cases, and
since the records can use any of the above mentioned loopholes,
these records are meaningless. The DOL doesn't check employers to
make sure they keep these records.
The $1,000 fine won't strike fear in any Fortune 500 company that
saves $20,000 a year by replacing an American worker with an H-1B.
The ACWIA contains some new civil penalties: regular failures and
"substantial" failures to meet the requirements still merit only
a $1000 fine; willful failures can be punished with a fine of up to $5000;
and willful failures that resulted in the illegal displacement of U.S.
workers within the 90-day period (assuming they can be proved!) can be
punished with a fine of up to $35,000.
The politicians that wrote
these laws methodically put in loopholes to provide companies with legal
protection when they fire U.S. employees and replace them with H-1Bs. These
loopholes are no accident; companies have lobbied to prevent these
loopholes from being removed.